Dan Evans wrote:

- quote -

And we're all sitting around waiting for the first
malpractice case to arise against someone in the estate
planning field for fouling that one up <grin> . While the
majority now seem aware of the "break" between the two
numbers, I still run into practitioners every so often who
are surprised when I mention that (hopefully they aren't
doing any advising on lifetime gifting...)

--
Ed Zollars, CPA
Phoenix, Arizona

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dan[at]evans-legal.com (Dan Evans) writes:

- quote -

Which starts to strain the menaing of "unified." I
assume (hope) that when you hit the $1M gift ceiling and
start paying gift tax you also stop chipping away at the
estate exemption?

Dan Lanciani
ddl[at]danlan*com

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- quote -

No one pays income tax on gifts. They will have to file a
gift tax return if they give you $50,000, and you will have
to file a gift tax return if you give them $50,000.

To avoid all this, just get a bridge loan to handle your
downpayment until you sell the old house. Your real estate
agent should be able to advise you.

Phil Marti
Topeka, KS

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Ah, let them loan you the money?

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"Lee Friedenberg" <ljfrieden[at]hotmail.com> wrote:

- quote -

First, be sure you understand how to determine if your
parents have enough potential estate (over 1 million each or
so). Even if they do, have they used any of their gift
exclusion of 1million each, the point being that they may
have the choice to elect to use part of that exclusion to
avoid paying gift tax.

Next, if there is a possibility you will repay the funds,
start out drafting it as a note payable. Even if you don't
pay them back, your parents could declare $22,000 or so each
year as a gift by releasing that much of the note. Such
amount doesn't even dip into the lifetime exclusion
mentioned above. Anyone can give annual gifts of $11,000
each to as many people as they want with no gift tax.

Mike Lewis, CPA

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"Lee Friedenberg" <ljfrieden[at]hotmail.com> wrote:

- quote -

You have not given enough (clear) information. For example,
is "my current home" the house you are "in the process of
buying" or a house you now own?

From what you provided, neither or both you and your parents
will owe gift tax.

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jfrieden[at]hotmail.com (Lee Friedenberg) wrote:

- quote -

The original gift is still a gift even if you decide to give
the same amount back to your parents.

However, there is probably not going to be any gift tax to
pay on the $50,000 unless your parents (or you) have
previously made more than $1,000,000 in lifetime gifts, due
to the federal gift tax unified credit applicable exclusion
amount (what a mouthful).

(And before anyone "corrects" me, the gift tax exemption is
still $1,000,000, not $1,500,000. The increase in the
unified credit only applies to estate tax, and not gift
tax.)

*Dan Evans
*Author of the Tax Protester FAQ
*http://evans-legal.com/dan/tpfaq.html

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"Lee Friedenberg" <ljfrieden[at]hotmail.com> wrote:

- quote -

Gifts are not taxable to the one getting the gift. They
may, in fact, be taxable to the ones giving the gift. This
depends on several factors.

Wayne Brasch, CPA, M. S. Taxation

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ljfrieden[at]hotmail.com (Lee Friedenberg) writes:

- quote -

Your action does not undo the gift they made. After all, if
they really did make a gift to you, they had no expectation
of being paid back and so that you were kind enough to pay
them back doesn't negate their action.

In fact, your "repayment" is itself a gift from *you* to
*them*.

So it looks like both you and them get to file gift tax
returns (though neither of you will actually pay any tax
with the return -- no tax is due until you've given
$1,000,000 (or is it $1,500,000 now?) of lifetime taxable
gifts).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Lee Friedenberg wrote:

- quote -

The facts and circumstances will dictate whether or not this
was TWO gifts (first to you, and secondly back to them) or
was merely an intrafamily loan. Merely returning a COMPLETED
gift doesn't un-do it as a gift.

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I am in the process of buying a house. My parents have
offered to give me $50,000 towards the purchase of the home.
If I use the money to buy the house and later decide to
give the money back (with proceeds from the sale of my
current home), will they have to pay taxes on the gift?
They are giving the money and do not expect me to pay it
back but I'm not sure that I want that hanging over my head!

Thanks

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